Is there a limit to the increase of intelligence?
Absolutely, regardless of how you define "intelligence".


If intelligence is merely information, as in "a piece of intelligence", as in data, or an algorithm, the structure is finite.  (Structure, here, refers to the information, which may be reduced to a single string in either case.)  


See: Turning Machine. 


If intelligence is the rational capability of an automata, it is likewise bounded by the tractability of the decision problem, the structure of the algorithm, and the time available to make the decision. 


See: Bounded Rationality

Both answers are really the same, because "intelligence" in the first sense is limited by physical constraints on information density, sophistication of the algorithm, and time.

See also: Computational complexity of mathematical operations, Computational complexity, Time Complexity